Posted on 12/17/2008 1:32:54 AM PST by Liz
Investors poring over Bernard Madoff's books have discovered he falsified documents to hide massive losses in a fraud that could take months to unravel......... Stephen Harbeck, chief executive of nonprofit Securities Investor Protection Corporation said there are different sets of books to sort through. One set keeps track of losses at Bernard L. Madoff Investment Securities LLC's investment advisory arm, while the other set is what investors were shown. A federal judge has ordered Madoff's investment business to be liquidated under a court-appointed trustee, who is mailing out paperwork to customers to assess how much assets were given to Madoff. SIPC, created by Congress and funded by the securities industry, can give customers up to $500,000 if money was stolen. SIPC will sort through the claims, with some investors claiming losses into "the hundreds of millions of dollars," and begin making settlements. It is not known how many customers Madoff's firm had. SIPC has about $1.6 billion to make payouts, which means that amount could quickly be depleted. A variety of investors have been identified: Spain's Grupo Santander SA, Britain's HSBC Holdings PLC and New York Mets owner Fred Wilpon. More victims emerged Tuesday: Rye Investment Management, Rye, NY lost $3.1B, almost all of its clients' funds, and Austria's Bank Medici, which had two funds with $2.1B (1.5 billion euros) invested with Madoff.
(Excerpt) Read more at news.yahoo.com ...
I do not believe these so-called "investors" sob stories for a nanosecond. Impossible to believe astute businessman who made fortunes in competitive businesses would allow themselves to be scammed.....unless.....these privileged elites were in collusion with Madoff to engage in a massive tax evasion scheme. Tax evasion would explain why savvy, astute businessmen were giving this guy huge sums ---$100-500 million--- to “invest.” Keep in mind, at the end Madoff was left with some $300 million out of $50 billion. That much money does not just evaporate.
Apparently Madoff kept a cut of the “investment” and wire-transferred the bulk offshore to friendly money laundering havens-----out of sight of the IRS, SEC, and US banking laws. The whole scam crashed b/c Madoff probably wanted a bigger cut but the "investors" refused.
NOTE: They keep saying they are "wiped out." However, savvy investors DO NOT put all their eggs in one basket as these people did. This whole deal smells to high heaven. People stupid enough to give Madoff $100-500 million to evade taxes are also criminals.
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TAX-EXEMPT FRAUD Madoff was handling millions in tax-exempt funds for so-called "charities." The IRS says the biggest potential for IRS fraud are these tax-exempt non-profit charities doing deals with other tax-exempt non-profits----all posing as do-gooder "foundations" and “charities.” For instance, the charity owners go on luxury trips "for charity" which are charged to the tax-exempt. A huge part of the fraud is tax evasion-----one non-profit "donating" to another non-profit "charity." This is nothing more than money laundering.....the charity takes a cut then converts the bulk of the donation to an offshore account for the donor's use later---out of sight of the IRS, SEC, and US banking laws.
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Most of his investors figured Madoff was doing something illegal---frontrunning---that's why they were getting big returns (16% even in down markets). Bernie was palling around with SEC types---Bernie bragged his niece married a SEC regulator----his "investors" figured they had an "in" and Bernie could get even more money for them without the SEC horning in. In effect, they were all aiding and abetting this fraud. These "smart, rich" types were never bothered about Madoff's sub rosa activities. Gotta love it that the "smartest and richest" people lost bigtime.
These people are decidedly NOT victims.
So, I don't see why the US government aka tax payers are on the hook to any of these tax evaders.
We’re not, yet.
They will claim the Sky is Falling if they are not made whole again by the Taxpayer. George W. Bush might just go along with their argument.
If you lend a crook your car to use as a get away car for a bank robbery and he tells you you will get a percentage of the robbery, Are you a victim if the crook also steals your car?
If the Carlisle Group was stung by Bernie you can bet that Bush will bail him out.
The source of the problem.
2. Did he 'invest' any of the money, or merely deposit checks and write dividend checks to old clients?
3. If he employed many people, what did they do? If they weren't actually investing did they knowingly keep false books and and prepare false account information?
4. What kind of account status report did the 'clients' receive? Did it show actual options trades and arbitrage accounts???? Or did they just receive a check in the mail every quarter?
5. What did he do with all the money he skimmed off the top? He has NO assets left? Off shore accounts??
“These people are decidedly NOT victims.....”
IMHO, they are scamming Obama...they “disappeared” their cash before his administration could get their hooks in it...
"I am gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations or at any point to seek formal authority to pursue them. "Moreover, a consequence of the failure to seek a formal order of investigation from the Commission is that subpoena power was not used to obtain information, but rather the staff relied upon information voluntarily produced by Mr. Madoff and his firm," the chairman said in his statement. His comments come at the same time news has surfaced that Shana Madoff Swanson, Madoff's niece, has been married to Eric Swanson, assistant director of the SEC's Office of Compliance, Inspections and Examinations' market-oversight unit, since 2006. Shana Swanson is the compliance attorney at Madoff's firm.
http://www.nypost.com/seven/12172008/business/madoff_family_ties_144527.htm
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Madoff's firm sent clients performance statement riddled with inaccuracies and other suspicious signs that should have raised red flags.......a Nov. 30 performance report suggests Madoff's outfit purchased Apple at $100.78 on Nov. 12. However, even accounting for a usual 3-day settlement period, the stock never traded at $100 a share.....trading range was between $90.01 and $92.43..... Others note Madoff used outmoded bookkeeping method to record performance data, and that his presentation, lacks details......
"These look like statements from the mid '90s..." said attorney Ross Intelisano, who's been retained by Madoff clients..... The lack of transparency is surprising since Madoff was considered a friend to regulators and a huge supporter of full disclosure. One forensic accountant said Madoff's client statements appear to have been printed using an outdated "impact printer," which haven't been in widespread use since the advent of laser printers. They even pre-date the dot-matrix printers used in the 1990s. "It's just odd for a guy managing $17 billion to being using this sort of technology," the accountant noted. ....
... one of the more striking red flags to jump out were the deficiencies in Madoff's overall strategy. "You're trying to get above-market returns by buying the bluest of the blue chips, and the truth is the largest of the large-cap stocks move proportionately the least because they have all their information factored into them," Ellis said. "It's just not a strategy that generates above-market returns."
http://www.nypost.com/seven/12172008/business/analysts__firm_sent_clients_dated_info_144523.htm
But they will be playing the 'victim' role to the hilt.
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